-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PTj5V6qvcS0Opd/jL76VgYl1lUW6IRLfeB14JnQNpHTMT8Et96jvtTBbSE9rRUBN IfFHPtbRwIuWq4wt85KJUQ== 0000950123-97-000093.txt : 19970109 0000950123-97-000093.hdr.sgml : 19970109 ACCESSION NUMBER: 0000950123-97-000093 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961031 FILED AS OF DATE: 19970108 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER SERIES FUND INC CENTRAL INDEX KEY: 0000356865 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 061052841 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-03346 FILM NUMBER: 97502444 BUSINESS ADDRESS: STREET 1: 140 GARDEN ST CITY: HARTFORD STATE: CT ZIP: 06154 BUSINESS PHONE: 2039875002 FORMER COMPANY: FORMER CONFORMED NAME: CONNECTICUT MUTUAL INVESTMENT ACCOUNTS INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: CONNECTICUT MUTUAL LIQUID ACCOUNT INC DATE OF NAME CHANGE: 19851106 N-30D 1 OPPENHEIMER DISCIPLINED ALLOCATION FUND 1 OPPENHEIMER DISCIPLINED ALLOCATION FUND ANNUAL REPORT OCTOBER 31, 1996 [PHOTO] "We want the comfort of having a variety of different investments, but the convenience of doing it with one fund." [OPPENHEIMERFUNDS LOGO] 2 NEWS BEAT THE AVERAGE Cumulative Total Return for the 5-Year Period Ended 9/30/96: Oppenheimer Disciplined Allocation Fund Class A (at net asset value)(1) 73.13% Lipper Balanced Funds Average for 72 Funds for the 5-Year Period Ended 9/30/96(3) 68.18% THE FUND'S CLASS A SHARES WERE RANKED **** AMONG 1,684 (3-YEAR), 1,014 (5-YEAR) AND 560 (10-YEAR) EQUITY FUNDS FOR THE COMBINED 3-, 5- AND 10-YEAR PERIODS ENDED 9/30/96 BY MORNINGSTAR MUTUAL FUNDS.(4) THIS FUND IS FOR PEOPLE WHO WANT A SIMPLE WAY TO PURSUE FAVORABLE OPPORTUNITIES ACROSS MANY DIFFERENT TYPES OF INVESTMENTS. HOW YOUR FUND IS MANAGED Oppenheimer Disciplined Allocation Fund seeks to maximize total investment return (including capital appreciation and income) principally by allocating assets among stocks, corporate bonds, U.S. government securities and money market instruments. The management team arrives at the portfolio allocation through a disciplined use of a multi-dimensional model. The model is analyzed periodically and allocations vary in response to current market dynamics. PERFORMANCE Total return for Class A shares for the 12 months ended 9/30/96 was 9.39%, without deducting sales charges. Cumulative total return for Class B shares since inception on 10/1/95 was 8.80%, without deducting sales charges. For Class C shares, cumulative total return since incep-tion on 5/1/96 was 2.25%, without deducting sales charges.(1) Your Fund's average annual total returns for Class A shares for the 1-, 5- and 10-year periods ended 9/30/96 were 3.10%, 10.29% and 11.00%, respectively. For Class B shares, cumulative total return since inception on 10/1/95 was 3.80%. For Class C shares, cumulative total return since inception on 5/1/96 was 1.25%.(2) OUTLOOK "Although the types of securities the Fund invests in have not been in favor for much of this year, our value-oriented stock, bond and asset allocation disciplines, introduced nearly ten years ago, have resulted in a clearly superior record relative to other funds in the same category." Peter Antos, Portfolio Manager October 31, 1996 Total returns include change in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. In reviewing performance and rankings, please remember that past performance does not guarantee future results. Investment return and principal value of an investment in the Fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. All classes of shares have the same investment portfolio but different expenses. For more complete information, please review the prospectus carefully before you invest. Prior to March 1, 1996, the Fund had a different investment adviser. However, the prior portfolio management team is now employed by OppenheimerFunds, Inc., the current adviser. 1. Includes change in net asset value per share without deducting any sales charges. Such performance would have been lower if sales charges were taken into account. 2. Class A returns include the current maximum initial sales charge of 5.75%. Class A shares were first publicly offered on 9/16/85. The Fund's maximum sales charge for Class A shares was less during a portion of some of the periods shown, and actual investment results will be different as a result. Class B returns include the applicable contingent deferred sales charge of 5% (since inception). Class C returns include the applicable contingent deferred sales charge of 1%. An explanation of the different performance calculations is in the Fund's prospectus. Class B and C shares are subject to an annual .75% asset-based sales charge. 3. Source: Lipper Analytical Services, 9/30/96. The Lipper average is shown for comparative purposes only. Funds included in the index may have different investment policies and risks than the Fund. Oppenheimer Disciplined Allocation Fund is characterized by Lipper as a balanced fund. Lipper performance is based on total return and does not take sales charges into account. 4. Source: Morningstar Mutual Funds, 9/30/96. Morningstar rankings are based on risk-adjusted investment return, after considering sales charges and expenses. Investment return measures a fund's (or class's) 3-, 5- and 10-year (depending on the inception of the class or fund) average annual total returns in excess of 90-day U.S. Treasury bill returns. Risk measures a fund's (or class's) performance below 90-day U.S. Treasury bill returns. Risk and returns are combined to produce star rankings, reflecting performance relative to the average fund in the fund's category. The top 10% of funds in each investment class receive 5 stars; the next 22.5%, 4 stars; the middle 35%, 3 stars; the next 22.5%, 2 stars; and the bottom 10%, 1 star. The 4-star current ranking is a weighted average of the 3-, 5- and 10-year rankings for the Fund's Class A shares, which were 3, 3 and 4 stars, weighted 20%/30%/50%, respectively. The 1-year star ranking is 2 stars, but is not included in Morningstar's overall ranking calculations. There were 1,684 funds in the 1-year period. Rankings are subject to change monthly. The Fund's Class A, B and C shares have the same investment portfolio but different expenses. 2 Oppenheimer Disciplined Allocation Fund 3 [PHOTO] Bridget A. Macaskill President Oppenheimer Disciplined Allocation Fund DEAR SHAREHOLDER, Following a summer of uncertainty surrounding the economy and the stock market, the arrival of fall brought renewed vigor to both. Most notable, the Dow Jones Industrial Average broke out of its fluctuating pattern and burst through the once-unimaginable 6,000 mark, sending many stock prices to all-time highs. But as the Dow began accelerating faster than the economy, a debate erupted about how long this bull run could last. Looking back, the autumn rally was clearly a result of three main factors: solid corporate profits, low inflation and stabilized interest rates, all of which attracted investors to Wall Street. And though the stock market is currently highly valued, there continue to be a number of positive economic influences that may extend the market's uphill run. We consider the leading catalyst to be the robust returns from corporate America, where a strong economy boosted third-quarter earnings. To date, we're still witnessing a cycle of events that could maintain the appeal of these companies to investors. For example, corporate streamlining efforts, such as spinoffs of non-core businesses, and consolidation within industries are helping to increase the cash flow of many firms. In return, additional cash flows enable these companies to add shareholder value by initiating stock repurchasing programs. As corporations buy back record amounts of their own stocks, they are reducing the supply and thereby raising the book value of their outstanding shares, a move which further contributes to higher stock prices. Additionally, the demand for stocks remains strong, largely because, as many experts believe, investors are taking more responsibility for their retirement investments. Indeed, as the country's baby boomers near retirement, they are becoming increasingly aware of the need to secure their own financial future, because they expect less and less from standard company pensions or Social Security. As a result, equity mutual funds have become the fastest growing means by which these investors are seeking to achieve their long-term goals. While these signs appear favorable for many well-managed companies, stock valuations remain at historically high levels, causing us to become more cautious about the market overall. We do not, however, expect to see a significant market decline. In fact, we are confident that as long as corporate earnings stay healthy, there will continue to be numerous investment opportunities available to fill the demand for stocks. Nevertheless, it is becoming more difficult to uncover true values and justify higher prices. Therefore, we believe the correct approach to take at this point is to carefully evaluate companies based on individual merits, such as strong management, fundamental business policies and long-term prospects for the future. Your portfolio manager discusses the outlook for your Fund in light of these broad issues on the following pages. Thank you for your confidence in OppenheimerFunds. We look forward to helping you reach your investment goals in the future. /s/ BRIDGET A. MACASKILL Bridget A. Macaskill November 21, 1996 3 Oppenheimer Disciplined Allocation Fund 4 PETER ANTOS STEPHEN LIBERA MICHAEL STRATHEARN KENNETH WHITE ARTHUR ZIMMER Portfolio Management Team Q + A AN INTERVIEW WITH YOUR FUND'S MANAGERS. HOW DID THE FUND PERFORM OVER THE PAST YEAR? While the Oppenheimer Disciplined Allocation Fund has a strong long-term record, 1996 has not been its best year. In keeping with our quantitative, value-oriented approach, the Fund had a smaller percentage of its portfolio invested in equities than other funds in the same category. In strong equity markets, like the one we have seen this period, riskier, more aggressive funds tend to perform better. However, our discipline favors undervalued, out-of-favor stocks. In this growing but volatile market, investors are anxious about the economic and political environments and are willing to pay for highly valued securities that offer a greater level of certainty. As a result, our emphasis on undervalued stocks was out of favor in this year's stock market. WHAT CHARACTERISTICS DO YOU LOOK FOR WHEN EVALUATING SECURITIES? We manage from the bottom up, looking at companies, not sectors, to find those investments with the most growth potential. When looking at equities, we screen the universe for out-of-favor, under-valued stocks that have had recent positive earnings surprises. On the fixed income side, we look for relatively high grade bonds to provide some stability and income. The Fund's allocation between stocks, bonds and cash is determined by identifying which among the three is the more under-valued group with the most potential for total return. WHAT INVESTMENTS MADE POSITIVE CONTRIBUTIONS TO PERFORMANCE? Selected stocks in the technology and energy sectors have been strong contributors to performance this year. Within technology, personal-computer-related stocks have been big winners. In the energy area, natural gas stocks have done best.(1) DID ANY INVESTMENTS OR MARKET FACTORS HURT THE FUND? As mentioned earlier, our underweighting in equities relative to our competition has hurt our performance. However, we stand by this position as data continues to suggest that the equity market is overvalued and may be due for a correction. In addition, although agricultural companies performed well for the Fund in the last quarter of 1995, they have underperformed this year. Because of low worldwide supplies of grain and increasing food consumption in developing countries, we had expected performance to remain strong well into 1996. It appears, however, that agricultural companies' stocks had moved too far, too fast late last year and since then they have dropped back to more realistic valuations. WHAT IS YOUR OUTLOOK FOR THE FUND? Although the types of securities the Fund invests in have not been in favor for much of this year, our value-oriented stock, bond and asset allocation disciplines, introduced nearly ten years ago, have resulted in a superior record relative to other funds in the same category. With only a few periods of underperformance in the Fund's history, we remain committed to these time-tested disciplines and do not intend to alter our strategy. 1. The Fund's portfolio is subject to change. 4 Oppenheimer Disciplined Allocation Fund 5 STATEMENT OF INVESTMENTS October 31, 1996
FACE MARKET VALUE AMOUNT SEE NOTE 1 - -------------------------------------------------------------------------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS--8.7% - -------------------------------------------------------------------------------------------------------------------------------- GOVERNMENT AGENCY--7.4% - -------------------------------------------------------------------------------------------------------------------------------- FHLMC/FNMA/SPONSORED--3.8% Federal Home Loan Mortgage Corp.: Collateralized Mtg. Obligations, Gtd. Multiclass Mtg. Participation Certificates, Series 1992-15, Cl. KZ, 7%, 2/25/22 $ 688,495 $ 597,270 Gtd. Multiclass Mtg. Participation Certificates, 6%, 3/1/09 913,902 889,117 Gtd. Multiclass Mtg. Participation Certificates, Series 1337, Cl. D, 6%, 8/15/07 1,000,000 942,180 Gtd. Multiclass Mtg. Participation Certificates, Series 1820, Cl. Pl, 5.75%, 7/15/06 1,000,000 979,063 Gtd. Multiclass Mtg. Participation Certificates, Series 1994-43, Cl. PE, 6%, 12/25/19 800,000 790,496 Series 1849, Cl. VA, 6%, 12/15/10 947,402 932,301 ------------------------------------------------------------------------------------------------- Federal National Mortgage Assn.: 6%, 12/1/03 937,679 921,383 6.50%, 3/1/26 754,821 722,251 7.50%, 1/1/08 414,136 422,079 7.50%, 3/1/08 366,445 373,459 7.50%, 6/1/08 254,522 259,394 Collateralized Mtg. Obligations, Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Series 1993-181, Cl. C, 5.40%, 10/25/02 400,000 397,000 Collateralized Mtg. Obligations, Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Series 1993-190, Cl. Z, 5.85%, 7/25/08 297,833 293,599 Interest-Only Stripped Mtg.-Backed Security, Series 1993-223, Cl. PM, 7.709%, 10/25/23(1) 2,655,775 442,346 ---------- 8,961,938 - -------------------------------------------------------------------------------------------------------------------------------- GNMA/GUARANTEED--3.6% Government National Mortgage Assn.: 6.50%, 10/15/23--4/15/24 5,806,473 5,593,732 7%, 4/15/09--2/15/24 1,622,059 1,613,111 7.50%, 3/15/09 805,644 824,311 8%, 5/15/17 557,587 577,967 ---------- 8,609,121 - -------------------------------------------------------------------------------------------------------------------------------- PRIVATE--1.3% - -------------------------------------------------------------------------------------------------------------------------------- COMMERCIAL--0.6% Chase Commercial Mortgage Securities Corp., Commercial Mtg. Obligations, Series 1996-1, Cl. A2, 7.60%, 7/18/28 1,500,000 1,539,023 - -------------------------------------------------------------------------------------------------------------------------------- MANUFACTURED HOUSING--0.2% Green Tree Financial Corp., Series 1994-7, Cl. A3, 8%, 3/15/20 500,000 511,405 - -------------------------------------------------------------------------------------------------------------------------------- MULTI-FAMILY--0.2% Housing Securities, Inc., Series 1994-3, Cl. A3, 7.25%, 9/25/12 362,868 363,548 - -------------------------------------------------------------------------------------------------------------------------------- RESIDENTIAL--0.3% GE Capital Mortgage Securities, Inc., Series-HE2, Cl. A3, 7.30%, 3/25/12 700,000 709,516 ---------- Total Mortgage-Backed Obligations (Cost $20,512,673) 20,694,551 ================================================================================================================================ U.S. GOVERNMENT OBLIGATIONS--36.3% - -------------------------------------------------------------------------------------------------------------------------------- AGENCY--22.4% - -------------------------------------------------------------------------------------------------------------------------------- Federal Home Loan Bank Consolidated Disc. Nts.: 5.16%, 11/14/96 20,000,000 19,962,733 5.50%, 11/1/96 26,200,000 26,200,000 ------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., 5.18%, 11/18/96 7,000,000 6,982,877 ---------- 53,145,610
5 Oppenheimer Disciplined Allocation Fund 6 STATEMENT OF INVESTMENTS (Continued)
FACE MARKET VALUE AMOUNT SEE NOTE 1 - -------------------------------------------------------------------------------------------------------------------------------- TREASURY--13.9% U.S. Treasury Bonds: 7.50%, 11/15/16 $8,475,000 $ 9,168,891 8.75%, 5/15/17 8,250,000 10,065,000 ------------------------------------------------------------------------------------------------- U.S. Treasury Nts.: 5.75%, 8/15/03 300,000 292,231 6.50%, 8/15/05 4,000,000 4,042,500 7.25%, 8/15/04 5,600,000 5,913,247 7.50%, 11/15/01 3,400,000 3,600,412 ------------ 33,082,281 ------------ Total U.S. Government Obligations (Cost $84,369,697) 86,227,891 ================================================================================================================================ FOREIGN GOVERNMENT OBLIGATIONS--0.3% - -------------------------------------------------------------------------------------------------------------------------------- Colombia (Republic of) Unsub. Nts., 7.125%, 5/11/98 300,000 301,125 ------------------------------------------------------------------------------------------------- United Mexican States Bonds, 6.97%, 8/12/00 250,000 234,062 ------------ Total Foreign Government Obligations (Cost $537,244) 535,187 ================================================================================================================================ NON-CONVERTIBLE CORPORATE BONDS AND NOTES--21.3% - -------------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS--2.2% - -------------------------------------------------------------------------------------------------------------------------------- CHEMICALS--1.3% Burmah Castrol plc, 7% Gtd. Medium-Term Nts., 12/15/97 500,000 506,585 ------------------------------------------------------------------------------------------------- FMC Corp., 8.75% Sr. Nts., 4/1/99 500,000 525,588 ------------------------------------------------------------------------------------------------- Lyondell Petrochemical Co., 8.25% Nts., 3/15/97 1,100,000 1,109,749 ------------------------------------------------------------------------------------------------- Morton International, Inc., 9.25% Credit Sensitive Nts., 6/1/20 500,000 612,666 ------------------------------------------------------------------------------------------------- PPG Industries, Inc., 9% Debs., 5/1/21 250,000 301,076 ------------ 3,055,664 - -------------------------------------------------------------------------------------------------------------------------------- METALS--0.4% Alcan Aluminum Ltd., 9.625% Debs., 7/15/19 850,000 921,706 - -------------------------------------------------------------------------------------------------------------------------------- PAPER--0.5% Celulosa Arauco y Constitucion SA, 7.25% Debs., 6/11/98 500,000 501,875 ------------------------------------------------------------------------------------------------- Georgia-Pacific Corp., 9.85% Credit Sensitive Nts., 6/15/97 750,000 768,057 ------------ 1,269,932 - -------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS--2.3% - -------------------------------------------------------------------------------------------------------------------------------- AUTOS & HOUSING--0.3% Black & Decker Corp., 6.625% Nts., 11/15/00 700,000 703,212 - -------------------------------------------------------------------------------------------------------------------------------- LEISURE & ENTERTAINMENT--0.7% Blockbuster Entertainment Corp., 6.625% Sr. Nts., 2/15/98 500,000 502,509 ------------------------------------------------------------------------------------------------- Walt Disney Co., 6.375% Sr. Unsec. Bonds, Series A, 3/30/01 1,250,000 1,248,499 ------------ 1,751,008 - -------------------------------------------------------------------------------------------------------------------------------- MEDIA--0.6% Reed Elsevier, Inc., 6.625% Nts., 10/15/23(2) 400,000 358,176 ------------------------------------------------------------------------------------------------- Tele-Communications, Inc., 7.14% Sr. Medium-Term Nts., 2/3/98 400,000 401,018 ------------------------------------------------------------------------------------------------- Time Warner, Inc., 7.45% Nts., 2/1/98 700,000 710,599 ------------ 1,469,793 - -------------------------------------------------------------------------------------------------------------------------------- RETAIL: GENERAL--0.7% Federated Department Stores, Inc., 10% Sr. Nts., 2/15/01 350,000 383,039 ------------------------------------------------------------------------------------------------- Price/Costco, Inc., 7.125% Sr. Nts., 6/15/05 400,000 398,918 ------------------------------------------------------------------------------------------------- Sears Roebuck & Co., 8.39% Medium-Term Nts., 3/23/99 300,000 314,879 ------------------------------------------------------------------------------------------------- Wal-Mart Stores, Inc., 5.875% Nts., 10/15/05 500,000 471,089 ------------ 1,567,925
6 Oppenheimer Disciplined Allocation Fund 7
FACE MARKET VALUE AMOUNT SEE NOTE 1 - -------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS--2.0% - -------------------------------------------------------------------------------------------------------------------------------- BEVERAGES--0.2% Fomento Economico Mexico SA, 9.50% Unsub. Nts., 7/22/97 $ 450,000 $ 456,188 - -------------------------------------------------------------------------------------------------------------------------------- FOOD--0.9% ConAgra, Inc., 9.75% Sr. Nts., 11/1/97 500,000 518,719 ------------------------------------------------------------------------------------------------- CPC International, Inc., 6.15% Unsec. Nts., Series C, 1/15/06 500,000 480,722 ------------------------------------------------------------------------------------------------- Dole Food Co., 6.75% Nts., 7/15/00 530,000 533,275 ------------------------------------------------------------------------------------------------- Great Atlantic & Pacific Tea Co., 9.125% Debs., 1/15/98 500,000 514,489 ---------- 2,047,205 - -------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE/DRUGS--0.4% Roche Holdings, Inc., 2.75% Bonds, 4/14/00 950,000 859,156 - -------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE/SUPPLIES & Tenet Healthcare Corp., 8.625% Sr. Unsec. Nts., 12/1/03 500,000 531,250 SERVICES--0.2% - -------------------------------------------------------------------------------------------------------------------------------- HOUSEHOLD GOODS--0.3% Electrolux AB, 7.75% Sr. Unsub. Debs., 6/17/97 500,000 505,000 ------------------------------------------------------------------------------------------------- Kimberly-Clark Corp., 7.875% Debs., 2/1/23 290,000 305,042 ---------- 810,042 - -------------------------------------------------------------------------------------------------------------------------------- ENERGY--2.5% - -------------------------------------------------------------------------------------------------------------------------------- ENERGY SERVICES & Coastal Corp., 8.125% Sr. Nts., 9/15/02 500,000 533,086 PRODUCERS--0.7% ------------------------------------------------------------------------------------------------- Ferrellgas LP/Ferrellgas Finance Corp., 10% Sr. Nts., 8/1/01 500,000 520,000 ------------------------------------------------------------------------------------------------- Petroliam Nasional Berhad, 6.875% Nts., 7/1/03(2) 500,000 505,377 ---------- 1,558,463 - -------------------------------------------------------------------------------------------------------------------------------- OIL-INTEGRATED--1.8% BP America, Inc., 8.875% Gtd. Debs., 12/1/97 500,000 515,641 ------------------------------------------------------------------------------------------------- Louisiana Land & Exploration Co., 7.65% Debs., 12/1/23 915,000 918,045 ------------------------------------------------------------------------------------------------- Norsk Hydro AS, 8.75% Bonds, 10/23/01 500,000 542,500 ------------------------------------------------------------------------------------------------- Occidental Petroleum Corp., 6.27% Medium-Term Nts., 11/8/00 1,000,000 990,307 ------------------------------------------------------------------------------------------------- Phillips Petroleum Co., 7.53% Pass-Through Certificates, Series 1994-A1, 9/27/98 733,269 743,704 ------------------------------------------------------------------------------------------------- TransCanada PipeLines Ltd., 9.875% Debs., 1/1/21 500,000 626,030 ---------- 4,336,227 - -------------------------------------------------------------------------------------------------------------------------------- FINANCIAL--8.3% - -------------------------------------------------------------------------------------------------------------------------------- BANKS--1.3% BankAmerica Corp., 6% Nts., 7/15/97 500,000 500,810 ------------------------------------------------------------------------------------------------- Chase Manhattan Corp. (New), 10.125% Sub. Nts., 11/1/00 250,000 281,550 ------------------------------------------------------------------------------------------------- Citicorp, 5.625% Sr. Nts., 2/15/01 550,000 533,401 ------------------------------------------------------------------------------------------------- First Fidelity Bancorporation, 8.50% Sub. Capital Nts., 4/1/98 500,000 514,866 ------------------------------------------------------------------------------------------------- Fleet Mtg./Norstar Group, Inc., 9.90% Sub. Nts., 6/15/01 250,000 282,204 ------------------------------------------------------------------------------------------------- Marshall & Ilsley Corp., 6.95% Medium-Term Nts., Series C, 3/31/97 500,000 502,739 ------------------------------------------------------------------------------------------------- Mellon Financial Bank Corp., 6.50% Gtd. Sr. Nts., 12/1/97 400,000 402,520 ---------- 3,018,090 - -------------------------------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL--6.6% American General Finance Corp.: 7.70% Sr. Nts., 11/15/97 500,000 509,242 8.50% Sr. Nts., 8/15/98 500,000 520,978 ------------------------------------------------------------------------------------------------- Aristar, Inc., 8.125% Sr. Nts., 12/1/97 250,000 255,684 ------------------------------------------------------------------------------------------------- Associates Corp. of North America, 6.75% Sr. Nts., 10/15/99 500,000 506,862 ------------------------------------------------------------------------------------------------- Capital One Financial Corp., 6.83% Sr. Nts., 5/17/99 500,000 503,502 ------------------------------------------------------------------------------------------------- Chrysler Financial Corp., 5.875% Nts., 2/7/01 1,000,000 977,424 ------------------------------------------------------------------------------------------------- Commercial Credit Co., 5.55% Unsec. Nts., 2/15/01 1,000,000 966,297
7 Oppenheimer Disciplined Allocation Fund 8 STATEMENT OF INVESTMENTS (Continued)
FACE MARKET VALUE AMOUNT SEE NOTE 1 - -------------------------------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL Countrywide Funding Corp.: (CONTINUED) 6.05% Gtd. Medium-Term Nts., Series D, 3/1/01 $ 400,000 $ 392,143 6.085% Gtd. Medium-Term Nts., Series B, 7/14/99 500,000 497,200 6.57% Gtd. Medium-Term Nts., Series A, 8/4/97 250,000 251,470 ------------------------------------------------------------------------------------------------- Fleet Mtg. Group, Inc.: 6.125% Nts., 8/15/97 1,000,000 1,002,308 6.50% Nts., 9/15/99 250,000 251,544 ------------------------------------------------------------------------------------------------- Ford Motor Credit Co.: 6.25% Unsub. Nts., 2/26/98 500,000 503,240 8% Nts., 12/1/97 500,000 510,781 ------------------------------------------------------------------------------------------------- General Motors Acceptance Corp.: 5.65% Medium-Term Nts., 12/15/97 1,000,000 997,437 7.75% Medium-Term Nts., 1/17/97 750,000 750,919 ------------------------------------------------------------------------------------------------- Golden West Financial Corp., 10.25% Sub. Nts., 5/15/97 500,000 511,471 ------------------------------------------------------------------------------------------------- Household Finance Corp. Ltd., 6% Gtd. Sr. Nts., 6/30/98 250,000 249,124 ------------------------------------------------------------------------------------------------- Household International BV, 6% Gtd. Sr. Nts., 3/15/99 500,000 496,279 ------------------------------------------------------------------------------------------------- Merrill Lynch & Co., Inc.: 6% Nts., 3/1/01 500,000 490,235 6.50% Nts., 4/1/01 500,000 499,441 ------------------------------------------------------------------------------------------------- Norwest Financial, Inc., 6.50% Sr. Nts., 11/15/97 500,000 503,435 ------------------------------------------------------------------------------------------------- Penske Truck Leasing Co. LP, 7.75% Sr. Nts., 5/15/99 750,000 779,938 ------------------------------------------------------------------------------------------------- Salomon, Inc., 8.69% Sr. Medium-Term Nts., Series D, 3/1/99 1,000,000 1,046,846 ------------------------------------------------------------------------------------------------- Sears Roebuck Acceptance Corp., 5.99% Medium-Term Nts., Series 1, 12/26/00 500,000 492,422 ------------------------------------------------------------------------------------------------- TransAmerica Finance Corp.: 6.75% Sr. Nts., 8/15/97 500,000 503,454 6.80% Sr. Nts., 3/15/99 250,000 253,357 ------------------------------------------------------------------------------------------------- U.S. Leasing International, 7% Nts., 11/1/97 500,000 505,296 ----------- 15,728,329 - -------------------------------------------------------------------------------------------------------------------------------- INSURANCE--0.4% Equitable Life Assurance Society (U.S.A.), 6.95% Surplus Nts., 12/1/05(2) 500,000 493,904 ------------------------------------------------------------------------------------------------- SunAmerica, Inc., 9% Sr. Nts., 1/15/99 450,000 473,497 ----------- 967,401 - -------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL MATERIALS--0.2% American Standard, Inc., 10.875% Sr. Nts., 5/15/99 490,000 523,075 - -------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL SERVICES--0.4% Bass America, Inc., 6.75% Gtd. Nts., 8/1/99 250,000 254,002 ------------------------------------------------------------------------------------------------- PHH Corp., 6.50% Nts., 2/1/00 350,000 351,469 ------------------------------------------------------------------------------------------------- Procter & Gamble Co., 9.36% Debs., 1/1/21 250,000 305,908 ----------- 911,379 - -------------------------------------------------------------------------------------------------------------------------------- MANUFACTURING--0.6% Mark IV Industries, Inc., 8.75% Sub. Nts., 4/1/03 400,000 409,000 ------------------------------------------------------------------------------------------------- Tenneco, Inc.: 10% Debs., 8/1/98 375,000 398,892 9.25% Sr. Nts., 11/1/96 500,000 500,000 ----------- 1,307,892 - -------------------------------------------------------------------------------------------------------------------------------- TRANSPORTATION--0.8% Federal Express Corp., 6.25% Nts., 4/15/98 750,000 751,807 ------------------------------------------------------------------------------------------------- Union Pacific Corp.: 7% Nts., 6/15/00 500,000 509,773 7.60% Nts., 5/1/05 500,000 520,770 ----------- 1,782,350
8 Oppenheimer Disciplined Allocation Fund 9
FACE MARKET VALUE AMOUNT SEE NOTE 1 - -------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY--0.4% - -------------------------------------------------------------------------------------------------------------------------------- AEROSPACE/DEFENSE--0.2% British Aerospace plc, 8% Debs., 5/27/97 $500,000 $ 505,938 - -------------------------------------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS- MCI Communications Corp., 7.125% Sr. Nts., 1/20/00 500,000 512,657 TECHNOLOGY--0.2% - -------------------------------------------------------------------------------------------------------------------------------- UTILITIES--1.6% - -------------------------------------------------------------------------------------------------------------------------------- ELECTRIC UTILITIES--0.3% Consumers Power Co., 8.75% Mtg. Nts., 2/15/98 500,000 513,559 ------------------------------------------------------------------------------------------------- El Paso Electric Co., 7.25% First Mtg. Nts., Series A, 2/1/99 250,000 250,625 ----------- 764,184 - -------------------------------------------------------------------------------------------------------------------------------- GAS UTILITIES--1.0% Columbia Gas System, Inc., 6.80% Nts., Series C, 11/28/05 500,000 493,576 ------------------------------------------------------------------------------------------------- NorAm Energy Corp., 9.875% Nts., 4/15/97 750,000 763,407 ------------------------------------------------------------------------------------------------- Northern Illinois Gas Co., 6.45% First Mtg. Bonds, 8/1/01 500,000 502,148 ------------------------------------------------------------------------------------------------- Williams Holdings of Delaware, Inc., 6.25% Sr. Unsec. Debs., 2/1/06 650,000 617,183 ----------- 2,376,314 - -------------------------------------------------------------------------------------------------------------------------------- TELEPHONE UTILITIES--0.3% GTE Corp., 8.85% Debs., 3/1/98 750,000 776,892 ----------- Total Non-Convertible Corporate Bonds and Notes (Cost $50,451,488) 50,512,272 SHARES ================================================================================================================================ COMMON STOCKS--32.7% - -------------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS--1.7% - -------------------------------------------------------------------------------------------------------------------------------- CHEMICALS--1.0% Cabot Corp. 9,900 238,837 ------------------------------------------------------------------------------------------------- Potash Corp. of Saskatchewan, Inc. 12,700 900,112 ------------------------------------------------------------------------------------------------- Union Carbide Corp. 28,000 1,193,500 ----------- 2,332,449 - -------------------------------------------------------------------------------------------------------------------------------- METALS--0.3% UCAR International, Inc.(3) 19,100 747,287 - -------------------------------------------------------------------------------------------------------------------------------- PAPER--0.4% Fort Howard Corp.(3) 41,900 1,073,687 - -------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS--3.6% - -------------------------------------------------------------------------------------------------------------------------------- AUTOS & HOUSING--0.3% Black & Decker Corp. 20,500 766,187 - -------------------------------------------------------------------------------------------------------------------------------- LEISURE & ENTERTAINMENT--0.7% AMR Corp.(3) 13,300 1,117,200 ------------------------------------------------------------------------------------------------- Northwest Airlines Corp., Cl. A(3) 17,100 566,437 ----------- 1,683,637 - -------------------------------------------------------------------------------------------------------------------------------- RETAIL: GENERAL--2.0% Eckerd Corp.(3) 47,600 1,320,900 ------------------------------------------------------------------------------------------------- Federated Department Stores, Inc.(3) 33,000 1,089,000 ------------------------------------------------------------------------------------------------- Price/Costco, Inc.(3) 61,100 1,214,362 ------------------------------------------------------------------------------------------------- U.S. Industries, Inc.(3) 43,700 1,179,900 ----------- 4,804,162 - -------------------------------------------------------------------------------------------------------------------------------- RETAIL: SPECIALTY--0.6% Toys 'R' Us, Inc.(3) 37,900 1,283,862 - -------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS--5.1% - -------------------------------------------------------------------------------------------------------------------------------- BEVERAGES--0.6% Anheuser-Busch Cos., Inc. 37,200 1,432,200 - -------------------------------------------------------------------------------------------------------------------------------- FOOD--2.1% American Stores Co. 36,100 1,493,637 ------------------------------------------------------------------------------------------------- Archer-Daniels-Midland Co. 54,780 1,191,465 ------------------------------------------------------------------------------------------------- Dole Food Co. 22,900 893,100 ------------------------------------------------------------------------------------------------- Kroger Co.(3) 30,500 1,361,062 ----------- 4,939,264
9 Oppenheimer Disciplined Allocation Fund 10 STATEMENT OF INVESTMENTS (Continued)
MARKET VALUE SHARES SEE NOTE 1 - ------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE/DRUGS--0.7% Bristol-Myers Squibb Co. 14,700 $1,554,525 - ------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE/SUPPLIES & Columbia/HCA Healthcare Corp. 20,850 745,388 SERVICES--0.8% ----------------------------------------------------------------------------------------------- OrNda Healthcorp(3) 44,400 1,209,900 ---------- 1,955,288 - ------------------------------------------------------------------------------------------------------------------------------ HOUSEHOLD GOODS--0.9% Premark International, Inc. 53,100 1,108,463 ----------------------------------------------------------------------------------------------- Tupperware Corp. 20,400 1,048,050 ---------- 2,156,513 - ------------------------------------------------------------------------------------------------------------------------------ ENERGY--2.1% - ------------------------------------------------------------------------------------------------------------------------------ Amoco Corp. 16,000 1,212,000 ----------------------------------------------------------------------------------------------- Chevron Corp. 28,900 1,900,175 ----------------------------------------------------------------------------------------------- Mobil Corp. 15,000 1,751,250 ---------- 4,863,425 - ------------------------------------------------------------------------------------------------------------------------------ FINANCIAL--5.4% - ------------------------------------------------------------------------------------------------------------------------------ BANKS--3.2% Bank of Boston Corp. 39,800 2,547,200 ----------------------------------------------------------------------------------------------- BankAmerica Corp. 25,400 2,324,100 ----------------------------------------------------------------------------------------------- Chase Manhattan Corp. (New) 7,500 643,125 ----------------------------------------------------------------------------------------------- NationsBank Corp. 10,900 1,027,325 ----------------------------------------------------------------------------------------------- PNC Bank Corp. 31,500 1,141,875 ---------- 7,683,625 - ------------------------------------------------------------------------------------------------------------------------------ DIVERSIFIED FINANCIAL--0.8% Crescent Real Estate Equities, Inc. 11,000 459,250 ----------------------------------------------------------------------------------------------- Salomon, Inc. 29,800 1,344,725 ---------- 1,803,975 - ------------------------------------------------------------------------------------------------------------------------------ INSURANCE--1.4% AFLAC, Inc. 29,600 1,187,700 ----------------------------------------------------------------------------------------------- General Re Corp. 7,100 1,045,475 ----------------------------------------------------------------------------------------------- Travelers/Aetna Property Casualty Corp., Cl. A 39,700 1,191,000 ---------- 3,424,175 - ------------------------------------------------------------------------------------------------------------------------------ INDUSTRIAL--4.4% - ------------------------------------------------------------------------------------------------------------------------------ MANUFACTURING--3.9% AGCO Corp. 36,900 936,338 ----------------------------------------------------------------------------------------------- Case Corp. 26,100 1,213,650 ----------------------------------------------------------------------------------------------- Deere & Co. 26,100 1,089,675 ----------------------------------------------------------------------------------------------- General Signal Corp. 28,600 1,165,450 ----------------------------------------------------------------------------------------------- Ingersoll-Rand Co. 26,000 1,082,250 ----------------------------------------------------------------------------------------------- Mark IV Industries, Inc. 23,939 517,681 ----------------------------------------------------------------------------------------------- Textron, Inc. 21,300 1,890,375 ----------------------------------------------------------------------------------------------- Tyco International Ltd. 28,400 1,409,350 ---------- 9,304,769 - ------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION--0.5% PACCAR, Inc. 6,600 367,950 ----------------------------------------------------------------------------------------------- Union Pacific Corp. 14,100 791,363 ---------- 1,159,313
10 Oppenheimer Disciplined Allocation Fund 11
MARKET VALUE SHARES SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY--5.6% - ---------------------------------------------------------------------------------------------------------------------------------- AEROSPACE/DEFENSE--3.5% General Dynamics Corp. 23,500 $ 1,612,688 --------------------------------------------------------------------------------------------------- Goodrich (B.F.) Co. 20,500 868,688 --------------------------------------------------------------------------------------------------- Lockheed Martin Corp. 20,071 1,798,863 --------------------------------------------------------------------------------------------------- McDonnell Douglas Corp. 30,500 1,662,250 --------------------------------------------------------------------------------------------------- Rockwell International Corp. 22,000 1,210,000 --------------------------------------------------------------------------------------------------- TRW, Inc. 13,500 1,221,750 ------------ 8,374,239 - ---------------------------------------------------------------------------------------------------------------------------------- COMPUTER HARDWARE--1.4% Dell Computer Corp.(3) 12,300 1,000,913 --------------------------------------------------------------------------------------------------- Gateway 2000, Inc.(3) 10,200 480,038 --------------------------------------------------------------------------------------------------- Storage Technology Corp. (New)(3) 42,300 1,803,038 ------------ 3,283,989 - ---------------------------------------------------------------------------------------------------------------------------------- ELECTRONICS--0.7% Atmel Corp.(3) 3,500 88,813 --------------------------------------------------------------------------------------------------- Intel Corp. 12,000 1,318,500 --------------------------------------------------------------------------------------------------- Waters Corp.(3) 7,500 232,500 ------------ 1,639,813 - ---------------------------------------------------------------------------------------------------------------------------------- UTILITIES--4.8% - ---------------------------------------------------------------------------------------------------------------------------------- ELECTRIC UTILITIES--2.0% American Electric Power Co., Inc. 18,000 747,000 --------------------------------------------------------------------------------------------------- CalEnergy, Inc.(3) 32,200 933,800 --------------------------------------------------------------------------------------------------- Entergy Corp. 38,600 1,080,800 --------------------------------------------------------------------------------------------------- FPL Group, Inc. 25,500 1,173,000 --------------------------------------------------------------------------------------------------- Texas Utilities Co. 22,800 923,400 ------------ 4,858,000 - ---------------------------------------------------------------------------------------------------------------------------------- GAS UTILITIES--2.3% Columbia Gas System, Inc. (The) 47,800 2,903,850 --------------------------------------------------------------------------------------------------- PanEnergy Corp. 55,400 2,132,900 --------------------------------------------------------------------------------------------------- Questar Corp. 11,900 428,400 ------------ 5,465,150 - ---------------------------------------------------------------------------------------------------------------------------------- TELEPHONE UTILITIES--0.5% GTE Corp. 25,300 1,065,763 ------------ Total Common Stocks (Cost $65,858,120) 77,655,297 - ---------------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $221,729,222) 99.3% 235,625,198 - ---------------------------------------------------------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 0 .7 1,771,142 ------ ------------ NET ASSETS 100 .0% $237,396,340 ====== ============
1. Interest-Only Strips represent the right to receive the monthly interest payments on an underlying pool of mortgage loans. These securities typically decline in price as interest rates decline. Most other fixed-income securities increase in price when interest rates decline. The principal amount of the underlying pool represents the notional amount on which current interest is calculated. The price of these securities is typically more sensitive to changes in prepayment rates than traditional mortgage-backed securities (for example, GNMA pass-throughs). Interest rates disclosed represent current yields based upon the current cost basis and estimated timing and amount of future cash flows. 2. Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as amended. This security has been determined to be liquid under guidelines established by the Board of Directors. These securities amount to $1,357,457, or 0.57% of the Fund's net assets, at October 31, 1996. 3. Non-income producing security. See accompanying Notes to Financial Statements. 11 Oppenheimer Disciplined Allocation Fund 12 STATEMENT OF ASSETS AND LIABILITIES October 31, 1996 - ------------------------------------------------------------------------------------------------------------------------ ASSETS Investments, at value (cost $221,729,222)--see accompanying statement $235,625,198 ------------------------------------------------------------------------------------------------------ Cash 110,935 ------------------------------------------------------------------------------------------------------ Receivables: Interest and dividends 2,113,722 Investments sold 632,933 Shares of capital stock sold 141,735 ------------ Total assets 238,624,523 - ------------------------------------------------------------------------------------------------------------------------ LIABILITIES Payables and other liabilities: Investments purchased 900,187 Shares of capital stock redeemed 82,560 Shareholder reports 63,295 Transfer and shareholder servicing agent fees 53,762 Distribution and service plan fees 50,177 Directors' fees 30,614 Other 47,588 ------------ Total liabilities 1,228,183 - ------------------------------------------------------------------------------------------------------------------------ NET ASSETS $237,396,340 ============ - ------------------------------------------------------------------------------------------------------------------------ COMPOSITION OF Par value of shares of capital stock $14,831 NET ASSETS ------------------------------------------------------------------------------------------------------ Additional paid-in capital 201,832,445 ------------------------------------------------------------------------------------------------------ Undistributed net investment income 1,524,191 ------------------------------------------------------------------------------------------------------ Accumulated net realized gain on investment transactions 20,128,897 ------------------------------------------------------------------------------------------------------ Net unrealized appreciation on investments--Note 3 13,895,976 ------------ Net assets $237,396,340 ============ - ------------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE Class A Shares: PER SHARE Net asset value and redemption price per share (based on net assets of $233,289,068 and 14,577,178 shares of capital stock outstanding) $16 .00 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $16 .98 ------------------------------------------------------------------------------------------------------ Class B Shares: Net asset value, redemption price and offering price per share (based on net assets of $3,919,201 and 242,457 shares of capital stock outstanding) $16 .16 ------------------------------------------------------------------------------------------------------ Class C Shares: Net asset value, redemption price and offering price per share (based on net assets of $188,071 and 11,803 shares of capital stock outstanding) $15 .93
See accompanying Notes to Financial Statements. 12 Oppenheimer Disciplined Allocation Fund 13 STATEMENT OF OPERATIONS For the Ten Months Ended October 31, 1996(1) - ------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest $ 7,400,106 ------------------------------------------------------------------------------------------------ Dividends (net of foreign withholding taxes of $348) 1,483,168 ------------ Total income 8,883,274 =============================================================================================================================== EXPENSES Management fees--Note 4 1,197,253 ------------------------------------------------------------------------------------------------ Distribution and service plan fees--Note 4: Class A 474,151 Class B 19,225 Class C 276 ------------------------------------------------------------------------------------------------ Transfer and shareholder servicing agent fees--Note 4 241,712 ------------------------------------------------------------------------------------------------ Legal and auditing fees 62,507 ------------------------------------------------------------------------------------------------ Custodian fees and expenses 49,857 ------------------------------------------------------------------------------------------------ Shareholder reports 46,129 ------------------------------------------------------------------------------------------------ Directors' fees and expenses--Note 1 30,614 ------------------------------------------------------------------------------------------------ Accounting fees 12,500 ------------------------------------------------------------------------------------------------ Registration and filing fees: Class A 2,177 Class B 964 Class C 56 ------------------------------------------------------------------------------------------------ Other 3,742 ------------ Total expenses 2,141,163 =============================================================================================================================== NET INVESTMENT INCOME 6,742,111 =============================================================================================================================== REALIZED AND UNREALIZED GAIN Net realized gain on investments 20,224,060 ------------------------------------------------------------------------------------------------ Net change in unrealized appreciation or depreciation on investments (12,786,272) ------------ Net realized and unrealized gain 7,437,788 =============================================================================================================================== NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $14,179,899 ===========
1. The Fund changed its fiscal year end from December 31 to October 31. See accompanying Notes to Financial Statements. 13 Oppenheimer Disciplined Allocation Fund 14 STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED TEN MONTHS ENDED DECEMBER 31, OCTOBER 31, 1996(1) 1995 ================================================================================================================================== OPERATIONS Net investment income $ 6,742,111 $ 8,004,370 --------------------------------------------------------------------------------------------------- Net realized gain 20,224,060 7,754,106 --------------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation (12,786,272) 26,965,439 ------------ ------------ Net increase in net assets resulting from operations 14,179,899 42,723,915 ================================================================================================================================== DIVIDENDS AND DISTRIBUTIONS Dividends from net investment income: TO SHAREHOLDERS Class A (5,234,654) (7,977,727) Class B (50,540) (2,581) Class C (1,461) -- --------------------------------------------------------------------------------------------------- Distributions from net realized gain: Class A (786,458) (7,615,071) Class B (8,614) (20,687) Class C (45) -- ================================================================================================================================== CAPITAL STOCK Net increase in net assets resulting from TRANSACTIONS capital stock transactions--Note 2: Class A 7,182,619 13,085,898 Class B 3,182,132 651,526 Class C 184,182 -- ================================================================================================================================== NET ASSETS Total increase 18,647,060 40,845,273 --------------------------------------------------------------------------------------------------- Beginning of period 218,749,280 177,904,007 ------------ ------------ End of period (including undistributed net investment income of $1,524,191 and $68,633, respectively) $237,396,340 $218,749,280 ============ ============
1. The Fund changed its fiscal year end from December 31 to October 31. See accompanying Notes to Financial Statements. 14 Oppenheimer Disciplined Allocation Fund 15 FINANCIAL HIGHLIGHTS
CLASS A ------------------------------------------------------------------------------ TEN MONTHS ENDED OCTOBER 31, YEAR ENDED DECEMBER 31, 1996(3) 1995 1994 1993 1992 1991 =========================================================================================================================== PER SHARE OPERATING DATA: Net asset value, beginning of period $15.46 $13.44 $14.54 $13.81 $14.02 $11.94 - --------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .46 .60 .55 .48 .50 .54 Net realized and unrealized gain (loss) .49 2.59 (.86) 1.70 .86 2.79 -------- -------- ------- -------- -------- ------- Total income (loss) from investment operations .95 3.19 (.31) 2.18 1.36 3.33 - --------------------------------------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.36) (.60) (.55) (.48) (.50) (.54) Distributions from net realized gain (.05) (.57) (.24) (.97) (1.07) (.71) -------- -------- -------- -------- -------- ------- Total dividends and distributions to shareholders (.41) (1.17) (.79) (1.45) (1.57) (1.25) - --------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $16.00 $15.46 $13.44 $14.54 $13.81 $14.02 ======== ======== ======== ======== ======== ======= =========================================================================================================================== TOTAL RETURN, AT NET ASSET VALUE(4) 6.27% 23.95% (2.11)% 15.89% 9.90% 28.21% =========================================================================================================================== RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $233,289 $218,099 $177,904 $171,205 $109,701 $86,455 - --------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $228,203 $200,172 $187,655 $138,629 $96,016 $74,749 - --------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 3.52%(5) 4.00% 3.80% 3.40% 3.61% 4.02% Expenses 1.11%(5) 1.17% 0.96% 1.02% 1.11% 1.20% - --------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate(6) 85.4% 55.2% 115.0% 155.2% 177.9% 122.4% Average brokerage commission rate(7) $0.0636 -- -- -- -- --
CLASS B CLASS C --------------------------- -------- TEN MONTHS PERIOD PERIOD ENDED ENDED ENDED OCTOBER 31, DEC. 31, OCT. 31, 1996(3) 1995(2) 1996(1) ================================================================================================== PER SHARE OPERATING DATA: Net asset value, beginning of period $15.66 $15.48 $15.71 - -------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .31 .07 .30 Net realized and unrealized gain (loss) .54 .70 .32 -------- -------- -------- Total income (loss) from investment operations .85 .77 .62 - ------------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.30) (.07) (.35) Distributions from net realized gain (.05) (.52) (.05) -------- -------- -------- Total dividends and distributions to shareholders (.35) (.59) (.40) - ------------------------------------------------------------------------------------------------ Net asset value, end of period $16.16 $15.66 $15.93 ======== ======== ======== ================================================================================================= TOTAL RETURN, AT NET ASSET VALUE(4) 5.51% 4.93% 4.08% ================================================================================================= RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $3,919 $650 $188 - ------------------------------------------------------------------------------------------------- Average net assets (in thousands) $2,324 $375 $ 57 - ------------------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 2.86%(5) 0.73%(5) 2.90%(5) Expenses 1.85%(5) 1.92%(5) 1.87%(5) - ------------------------------------------------------------------------------------------------- Portfolio turnover rate(6) 85.4% 55.2% 85.4% Average brokerage commission rate(7) $0.0636 -- $0.0636
1. For the period from May 1, 1996 (inception of offering) to October 31, 1996. 2. For the period from October 1, 1995 (inception of offering) to December 31, 1995. 3. The Fund changed its fiscal year end from December 31 to October 31. On March 18, 1996, OppenheimerFunds, Inc. became the investment adviser to the Fund. 4. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period (or inception of offering), with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. 5. Annualized. 6. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended October 31, 1996 were $166,027,550 and $159,855,450, respectively. 7. Total brokerage commissions paid on applicable purchases and sales of portfolio securities for the period divided by the total number of related shares purchased and sold. See accompanying Notes to Financial Statements. 15 Oppenheimer Disciplined Allocation Fund 16 NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Disciplined Allocation Fund (the Fund), a series of Oppenheimer Series Fund, Inc. (the Company) is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. On August 15, 1996, the Board of Directors elected to change the fiscal year end of the Fund from December 31 to October 31. Accordingly, these financial statements include information for the ten month period from January 1, 1996 to October 31, 1996. The Fund's investment objective is to seek high total investment return (current income and capital appreciation in the value of its shares). Until March 18, 1996, the Fund and the Company were named Connecticut Mutual Total Return Account and Connecticut Mutual Investment Accounts, Inc., respectively. On January 27, 1996, the policyholders of Connecticut Mutual Life Insurance Company (CML) approved a merger of CML with Massachusetts Mutual Life Insurance Company (MML). In line with this change, effective March 18, 1996, OppenheimerFunds, Inc. (the Manager) became the adviser of the Company. The Fund offers Class A, Class B and Class C shares. Class A shares are sold with a front-end sales charge. Class B and Class C shares may be subject to a contingent deferred sales charge. All three classes of shares have identical rights to earnings, assets and voting privileges, except that each class has its own distribution and/or service plan, expenses directly attributable to a particular class and exclusive voting rights with respect to matters affecting a single class. Class B shares will automatically convert to Class A shares six years after the date of purchase. The following is a summary of significant accounting policies consistently followed by the Fund. -------------------------------------------------------- INVESTMENT VALUATION. Portfolio securities are valued at the close of the New York Stock Exchange on each trading day. Listed and unlisted securities for which such information is regularly reported are valued at the last sale price of the day or, in the absence of sales, at values based on the closing bid or the last sale price on the prior trading day. Long-term and short-term "non-money market" debt securities are valued by a portfolio pricing service approved by the Board of Directors. Such securities which cannot be valued by the approved portfolio pricing service are valued using dealer-supplied valuations provided the Manager is satisfied that the firm rendering the quotes is reliable and that the quotes reflect current market value, or are valued under consistently applied procedures established by the Board of Directors to determine fair value in good faith. Short-term "money market type" debt securities having a remaining maturity of 60 days or less are valued at cost (or last determined market value) adjusted for amortization to maturity of any premium or discount. -------------------------------------------------------- REPURCHASE AGREEMENTS. The Fund requires the custodian to take possession, to have legally segregated in the Federal Reserve Book Entry System or to have segregated within the custodian's vault, all securities held as collateral for repurchase agreements. The market value of the underlying securities is required to be at least 102% of the resale price at the time of purchase. If the seller of the agreement defaults and the value of the collateral declines, or if the seller enters an insolvency proceeding, realization of the value of the collateral by the Fund may be delayed or limited. -------------------------------------------------------- ALLOCATION OF INCOME, EXPENSES, AND GAINS AND LOSSES. Income, expenses (other than those attributable to a specific class) and gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. 16 Oppenheimer Disciplined Allocation Fund 17 - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) DIRECTORS' FEES AND EXPENSES. The Fund has adopted a nonfunded retirement plan for the Fund's independent directors. Benefits are based on years of service and fees paid to each director during the years of service. During the ten months ended October 31, 1996, a provision of $22,420 was made for the Fund's projected benefit obligations, resulting in an accumulated liability of $22,420. -------------------------------------------------------- FEDERAL TAXES. The Fund intends to continue to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income, including any net realized gain on investments not offset by loss carryovers, to shareholders. Therefore, no federal income or excise tax provision is required. -------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders are recorded on the ex-dividend date. -------------------------------------------------------- CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes primarily because of paydown gains and losses and the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes. The character of the distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gain (loss) was recorded by the Fund. During the period ended October 31, 1996, the Fund adjusted the classification of net investment income and capital gain (loss) to reflect the differences between financial statement amounts and distributions determined in accordance with income tax regulations. During the period ended October 31, 1996, amounts have been reclassified to reflect a decrease in paid-in capital of $49,014, an increase in accumulated net realized gain of $48,912 and an increase in undistributed net investment income of $102. -------------------------------------------------------- OTHER. Investment transactions are accounted for on the date the investments are purchased or sold (trade date) and dividend income is recorded on the ex-dividend date. Discount on securities purchased is amortized over the life of the respective securities, in accordance with federal income tax requirements. Realized gains and losses on investments and unrealized appreciation and depreciation are determined on an identified cost basis, which is the same basis used for federal income tax purposes. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. 17 Oppenheimer Disciplined Allocation Fund 18 NOTES TO FINANCIAL STATEMENTS (Continued) ================================================================================ 2. SHARES OF CAPITAL STOCK The Fund has authorized 450 million of $0.001 par value shares of capital stock. Transactions in shares of capital stock were as follows:
TEN MONTHS ENDED OCTOBER 31, 1996(2) YEAR ENDED DECEMBER 31, 1995(1) ------------------------------------ ------------------------------- SHARES AMOUNT SHARES AMOUNT ----------------------------------------------------------------------------------------------------------- Class A: Sold 2,232,163 $ 34,798,022 1,998,083 $29,691,366 Dividends and distributions reinvested 380,285 5,902,477 1,003,774 15,305,644 Redeemed (2,143,354) (33,517,880) (2,126,335) (31,911,112) ---------- ------------ ----------- ------------ Net increase 469,094 $7,182,619 875,522 $ 13,085,898 ========== ============ =========== ============ ------------------------------------------------------------------------------------------------------- Class B: Sold 222,321 $3,523,228 40,033 $628,572 Dividends and distributions reinvested 3,640 57,138 1,471 22,954 Redeemed (25,008) (398,234) -- -- ---------- ------------ ----------- ------------ Net increase 200,953 $3,182,132 41,504 $651,526 ========== ============ =========== ============ ------------------------------------------------------------------------------------------------------- Class C: Sold 11,772 $183,684 -- $ -- Dividends and distributions reinvested 95 1,489 -- -- Redeemed (64) (991) -- -- ---------- ------------ ----------- ------------ Net increase 11,803 $184,182 -- $ -- ========== ============ =========== ============
1. For the year ended December 31, 1995 for Class A shares and for the period from October 1, 1995 (inception of offering) to December 31, 1995 for Class B shares. 2. For the ten months ended October 31, 1996 for Class A and Class B shares and for the period from May 1, 1996 (inception of offering) to October 31, 1996 for Class C shares. The Fund changed its fiscal year end from December 31 to October 31. ================================================================================ 3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS At October 31, 1996, net unrealized appreciation on investments of $13,895,976 was composed of gross appreciation of $15,320,901, and gross depreciation of $1,424,925. 18 Oppenheimer Disciplined Allocation Fund 19 ================================================================================ 4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES Management fees paid to the Manager are in accordance with the investment advisory agreement with the Fund which provides for a fee of 0.625% on the first $300 million of average annual net assets, 0.50% of the next $100 million and 0.45% of net assets in excess of $400 million. Prior to March 18, 1996, management fees were paid to G.R. Phelps & Co. (the former Manager) at an annual rate of 0.625% of the Fund's average net assets. The Manager has agreed to reimburse the Fund if aggregate expenses (with specified exceptions) exceed the most stringent applicable regulatory limit on Fund expenses. For the period ended October 31, 1996, commissions (sales charges paid by investors) on sales of Class A shares totaled $703,460, of which $501,951 was retained by OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary of the Manager, as general distributor, and by an affiliated broker/dealer. Sales charges advanced to broker/dealers by OFDI on sales of the Fund's Class B and Class C shares totaled $93,675 and $1,236, of which $60,694 was paid to an affiliated broker/dealer for Class B. During the period ended October 31, 1996, OFDI received contingent deferred sales charges of $12,848 upon redemption of Class B shares as reimbursement for sales commissions advanced by OFDI at the time of sale of such shares. OppenheimerFunds Services (OFS), a division of the Manager, is the transfer and shareholder servicing agent for the Fund, and for other registered investment companies. OFS's total costs of providing such services are allocated ratably to these companies. The Fund has adopted a Service Plan for Class A shares to reimburse OFDI for a portion of its costs incurred in connection with the personal service and maintenance of accounts that hold Class A shares. Reimbursement is made quarterly at an annual rate that may not exceed 0.25% of the average annual net assets of Class A shares of the Fund. OFDI uses the service fee to reimburse brokers, dealers, banks and other financial institutions quarterly for providing personal service and maintenance of accounts of their customers that hold Class A shares. During the period ended October 31, 1996, OFDI paid $324,243 to an affiliated broker/dealer as reimbursement for Class A personal service and maintenance expenses. The Fund has adopted compensation type Distribution and Service Plans for Class B and Class C shares to compensate OFDI for its services and costs in distributing Class B and Class C shares and servicing accounts. Under the Plans, the Fund pays OFDI an annual asset-based sales charge of 0.75% per year on Class B and Class C shares, as compensation for sales commissions paid from its own resources at the time of sale and associated financing costs. OFDI also receives a service fee of 0.25% per year as compensation for costs incurred in connection with the personal service and maintenance of accounts that hold shares of the Fund, including amounts paid to brokers, dealers, banks and other financial institutions. Both fees are computed on the average annual net assets of Class B and Class C shares, determined as of the close of each regular business day. During the period ended October 31, 1996, OFDI paid $15,073 to an affiliated broker/dealer as compensation for Class B personal service and maintenance expenses. If the Plans are terminated by the Fund, the Board of Directors may allow the Fund to continue payments of the asset-based sales charge to OFDI for certain expenses it incurred before the Plans were terminated. As of October 31, 1996, OFDI had incurred unreimbursed expenses of $59,091 for Class B and $2,436 for Class C. 19 Oppenheimer Disciplined Allocation Fund 20 INDEPENDENT AUDITORS' REPORT - -------------------------------------------------------------------------------- The Board of Directors and Shareholders of Oppenheimer Disciplined Allocation Fund: We have audited the accompanying statements of investments and assets and liabilities of Oppenheimer Disciplined Allocation Fund (formerly Connecticut Mutual Growth Account) as of October 31, 1996, and the related statement of operations, the statement of changes in net assets and the financial highlights for the ten month period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. The statement of changes in net assets for the year ended December 31, 1995 and the financial highlights for the five years ended December 31, 1995 were audited by other auditors whose report dated February 9, 1996, expressed an unqualified opinion on this information. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 1996 by correspondence with the custodian and brokers; and where confirmations were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Oppenheimer Disciplined Allocation Fund as of October 31, 1996, and the results of its operations, the changes in its net assets, and the financial highlights for the ten month period ended October 31, 1996, in conformity with generally accepted accounting principles. KPMG PEAT MARWICK LLP Denver, Colorado November 21, 1996 20 Oppenheimer Disciplined Allocation Fund 21 FEDERAL INCOME TAX INFORMATION (Unaudited) - -------------------------------------------------------------------------------- In early 1997 shareholders will receive information regarding all dividends and distributions paid to them by the Fund during calendar year 1996. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service. Dividends paid by the Fund during the ten months ended October 31, 1996 which are not designated as capital gain distributions should be multiplied by 13.62% to arrive at the net amount eligible for the corporate dividend-received deduction. The foregoing information is presented to assist shareholders in reporting distributions received from the Fund to the Internal Revenue Service. Because of the complexity of the federal regulations which may affect your individual tax return and the many variations in state and local tax regulations, we recommend that you consult your tax adviser for specific guidance. 21 Oppenheimer Disciplined Allocation Fund 22 OPPENHEIMER DISCIPLINED ALLOCATION FUND A Series of Oppenheimer Series Fund, Inc. - -------------------------------------------------------------------------------- OFFICERS AND DIRECTORS Leon Levy, Chairman of the Board of Directors Donald W. Spiro, Vice Chairman of the Board of Directors Bridget A. Macaskill, Director and President Robert G. Galli, Director Benjamin Lipstein, Director Elizabeth B. Moynihan, Director Kenneth A. Randall, Director Edward V. Regan, Director Russell S. Reynolds, Jr., Director Sidney M. Robbins, Director Pauline Trigere, Director Clayton K. Yeutter, Director Peter M. Antos, Vice President Robert C. Doll, Jr., Vice President Stephen F. Libera, Vice President Michael C. Strathearn, Vice President Kenneth B. White, Vice President Arthur J. Zimmer, Vice President George C. Bowen, Treasurer Robert J. Bishop, Assistant Treasurer Scott T. Farrar, Assistant Treasurer Andrew J. Donohue, Secretary Robert G. Zack, Assistant Secretary - -------------------------------------------------------------------------------- INVESTMENT ADVISER OppenheimerFunds, Inc. - -------------------------------------------------------------------------------- DISTRIBUTOR OppenheimerFunds Distributor, Inc. - -------------------------------------------------------------------------------- TRANSFER AND SHAREHOLDER OppenheimerFunds Services SERVICING AGENT - -------------------------------------------------------------------------------- CUSTODIAN OF State Street Bank and Trust Company PORTFOLIO SECURITIES - -------------------------------------------------------------------------------- INDEPENDENT AUDITORS KPMG Peat Marwick LLP - -------------------------------------------------------------------------------- LEGAL COUNSEL Gordon Altman Butowsky Weitzen Shalov & Wein This is a copy of a report to shareholders of Oppenheimer Disciplined Allocation Fund. This report must be preceded or accompanied by a Prospectus of Oppenheimer Disciplined Allocation Fund. For material information concerning the Fund, see the Prospectus. Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, and are not insured by the FDIC or any other agency, and involve investment risks, including possible loss of the principal amount invested. 22 Oppenheimer Disciplined Allocation Fund 23 OPPENHEIMERFUNDS FAMILY - -------------------------------------------------------------------------------- OppenheimerFunds offers over 50 funds designed to fit virtually every investment goal. Whether you're investing for retirement, your children's education or tax-free income, we have the funds to help you seek your objective. When you invest with OppenheimerFunds, you can feel comfortable knowing that you are investing with a respected financial institution with over 35 years of experience in helping people just like you reach their financial goals. And you're investing with a leader in global, growth stock and flexible fixed-income investments--with over 3 million shareholder accounts and more than $55 billion under OppenheimerFunds' management and that of our affiliates. At OppenheimerFunds we don't charge a fee to exchange shares. And you can exchange shares easily by mail or by telephone.1 For more information on Oppenheimer funds, please contact your financial adviser or call us at 1-800-525-7048 for a prospectus. You may also write us at the address shown on the back cover. As always, please read the prospectus carefully before you invest. - -------------------------------------------------------------------------------- STOCK FUNDS Developing Markets Fund Growth Fund Global Emerging Growth Fund Global Fund Enterprise Fund2 Quest Global Value Fund International Growth Fund Disciplined Value Fund Discovery Fund Oppenheimer Fund Quest Small Cap Value Fund Value Stock Fund Gold & Special Minerals Fund Quest Value Fund Target Fund - ----------------------------------------------------------------------------------------------------------------- STOCK & BOND FUNDS Main Street Income & Growth Fund Equity Income Fund Quest Opportunity Value Fund Disciplined Allocation Fund Total Return Fund Asset Allocation Fund Quest Growth & Income Value Fund Strategic Income & Growth Fund Global Growth & Income Fund Bond Fund for Growth - ----------------------------------------------------------------------------------------------------------------- BOND FUNDS International Bond Fund Bond Fund High Yield Fund U.S. Government Trust Champion Income Fund Limited-Term Government Fund Strategic Income Fund - ----------------------------------------------------------------------------------------------------------------- MUNICIPAL FUNDS California Municipal Fund3 Insured Municipal Fund Florida Municipal Fund3 Intermediate Municipal Fund New Jersey Municipal Fund3 New York Municipal Fund3 Rochester Division Pennsylvania Municipal Fund3 Rochester Fund Municipals Municipal Bond Fund Limited Term New York Municipal Fund - ----------------------------------------------------------------------------------------------------------------- MONEY MARKET FUNDS(4) Money Market Fund Cash Reserves - ----------------------------------------------------------------------------------------------------------------- Growth Fund Income Fund Balanced Fund
1. Exchange privileges are subject to change or termination. Shares may be exchanged only for shares of the same class of eligible funds. 2.Effective 4/1/96, the Fund is closed to new investors. 3. Available only to investors in certain states. 4. An investment in money market funds is neither insured nor guaranteed by the U.S. government and there can be no assurance that a money market fund will be able to maintain a stable net asset value of $1.00 per share. Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc., Two World Trade Center, New York, NY 10048-0203. (C) Copyright 1996 OppenheimerFunds, Inc. All rights reserved. 23 Oppenheimer Disciplined Allocation Fund 24 INFORMATION GENERAL INFORMATION Monday-Friday 8:30 a.m.-9 p.m. ET Saturday 10 a.m.-2 p.m. ET 1-800-525-7048 TELEPHONE TRANSACTIONS Monday-Friday 8:30 a.m.-8 p.m. ET 1-800-852-8457 PHONELINK 24 hours a day, automated information and transactions 1-800-533-3310 TELECOMMUNICATIONS DEVICE FOR THE DEAF (TDD) Monday-Friday 8:30 a.m.-8 p.m. ET 1-800-843-4461 OPPENHEIMERFUNDS INFORMATION HOTLINE 24 hours a day, timely and insightful messages on the economy and issues that affect your investments 1-800-835-3104 RA0205.001.1096 December 31, 1996 [PHOTO] Customer Service Representative OppenheimerFunds Services "HOW MAY I HELP YOU?" As an Oppenheimer fund shareholder, you have some special privileges. Whether it's automatic investment plans, informative newsletters and hotlines, or ready account access, you can benefit from services designed to make investing simple. And when you need help, our Customer Service Representatives are only a toll-free phone call away. They can provide information about your account and handle administrative requests. You can reach them at our General Information number. When you want to make a transaction, you can do it easily by calling our toll-free Telephone Transactions number. And, by enrolling in AccountLink, a convenient service that ''links'' your Oppenheimer funds accounts and your bank checking or savings account, you can use the Telephone Transactions number to make investments. For added convenience, you can get automated information with OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week. PhoneLink gives you access to a variety of fund, account, and market information. Of course, you can always speak with a Customer Service Representative during the General Information hours shown at the left. You can count on us whenever you need assistance. That's why the International Customer Service Association, an independent, nonprofit organization made up of over 3,200 customer service management professionals from around the country, honored the Oppenheimer funds' transfer agent, OppenheimerFunds Services, with their Award of Excellence in 1993. So call us today--we're here to help. [OPPENHEIMERFUNDS LOGO] OppenheimerFunds Distributor, Inc. P.O. Box 5270 Denver, CO 80217-5270 - --------------- Bulk Rate U.S. Postage PAID Permit No. 469 Denver, CO - --------------- -----END PRIVACY-ENHANCED MESSAGE-----